Press Release

CollabNet receives $9.5 million in private financing

CollabNet closes round of venture funding; plans expansion of strategic investments to extend six year leadership position in on-demand distributed software development

BRISBANE, Calif., September 06, 2005 — CollabNet, the leading provider of on-demand distributed development solutions, today announced that it has closed a $9.5 million round of private financing. This Series B1 financing was supported by Benchmark, Industry Ventures, Intel, Norwest Venture Partners, and WR Hambrecht. The company, which has maintained its leadership position in the distributed software development market for more than six years, plans to invest this round of funding in sales, marketing, and other strategic investments.

As growth in the distributed development market accelerates, the demand for CollabNet Enterprise Edition and CollabNet Team Edition continues to intensify. Accordingly, CollabNet sales have grown steadily for the past six years in response to this demand. The growth of the globally distributed development market is being driven by several emerging trends including Web services, outsourcing, open source projects, product convergence, and compliance mandates such as Sarbanes Oxley. CollabNet plans to use this round of funding to further its growth and extend its leadership position in this rapidly growing market.

"CollabNet continues to lead this industry by developing new, cost-effective ways for businesses of all sizes to collaborate on software development projects in distributed environments," said Jim Lussier, venture partner, Norwest Venture Partners. "Our global economy demands that we find efficient methods to work seamlessly across borders. CollabNet products, multiple sales channels, and experienced senior management team continue to drive innovative distributed development and collaboration initiatives that truly are changing the way companies do business."

CollabNet is seeing growth in both the traditional enterprise market as well as in project teams within smaller companies. CollabNet Enterprise Edition is now used by more than 500,000 software developers with thousands of companies in hundreds of countries worldwide to perform distributed development across their organization to address their application lifecycle management (ALM) needs. CollabNet's Web-based software development tools can be customized for any process or project and provide full security, visibility, and access to centralized assets on-demand.

In July, CollabNet introduced CollabNet Team Edition, a streamlined version of CollabNet Enterprise Edition, to deliver cost-savings and reduced time-to-market advantages to teams in smaller organizations via an on-demand Software as a Service (SaaS) delivery. According to IDC, spending on SaaS will reach more than $9 billion worldwide by 2008. CollabNet Team Edition positions the company to take advantage of this dramatic growth. Team Edition offers dynamic communication, cooperation, and coordination with team members by aligning and aggregating people, projects, and processes. With SaaS delivery, team members can access the CollabNet commerce-enabled environment (www.team.collab.net) from any Web browser and begin collaborating on projects in minutes.

"We continue to stay ahead of market trends and deliver distributed development products to market ahead of our competitors. Our willingness to invest in our growth, combined with six years of unmatched experience in the collaboration market gained by continuing to push the distributed development envelope with our clients and business partners has helped us to maintain our leadership position and consistently gain market share," said Bill Portelli, President and CEO of CollabNet. "Aside from our proven business strategies, we are focused on leading the evolution of collaborative development environments and evoking change in business processes. This round of funding will help us to expand our sales and marketing efforts and invest in additional strategic channels, partnerships, and solutions that will allow us to grow our business and more efficiently deliver our products to companies in need of distributed development solutions."